Real estate data provider CoreLogic said Tuesday that prices rose 7.4 percent in July from July 2013. That was slightly below June's year-over-year increase of 7.5 percent and far below a recent peak of 11.9 percent in February.
Prices rose 1.2 percent in July from June. But CoreLogic's monthly figures aren't adjusted for seasonality, such as increased buying that occurs in warm weather.
The smaller price gains should make homes more affordable. The average 30-year fixed mortgage rate was 4.1 percent last week, the lowest in a year. And the number of available homes rose 3.5 percent in July to the most in nearly two years. A greater supply tends to limit the bidding wars that inflate prices.
Greater affordability has helped housing recover over the spring and summer after sales and construction fell earlier this year. Sales of existing homes rose for a fourth straight month in July to their strongest pace in nine months. And a measure of signed contracts also increased in July, suggesting that final sales will rise further in coming months.
Home prices rose in 49 states in July from the previous year but fell in Arkansas, CoreLogic said. Michigan experienced the biggest price gain, at 11.4 percent. It was followed by Maine, at 10.6 percent; Nevada, 10.6 percent; Hawaii 10.5 percent; and California, at 10.5 percent.
Prices in 11 states and Washington, D.C., have now completely rebounded from the housing bust and reached new highs. Those states are: Alaska, Colorado, Iowa, Louisiana, Nebraska, North Dakota, Oklahoma, South Dakota, Tennessee, Texas and Vermont.
Some mixed signals have emerged about the housing market. Home construction jumped 15.7 percent in July to an eight-month high as developers broke ground on more single-family homes and apartment buildings. But sales of new homes fell that month, which could limit future construction.
Housing helped boost the economy in the April-June quarter, when growth reached an annual rate of 4.2 percent. Housing had subtracted from growth in the previous two quarters.